Nipponkoa Insurance Company, LTD (U.S. Branch) et al v. Dove Transportation, Inc. et al
Dove's motion to strike the Second Amended Complaint (Doc. 29) is denied forthe reasons stated above. Counts 2, 3 and 4 as alleged in Plaintiffs First Amended Complaint are dismissed with prejudice. Dove's motion to dismiss Plaintiffs comp laint for lack of personal jurisdiction over Dove (Doc. 19) is granted. Plaintiff's motion to conduct additional jurisdictional discovery (Doc. 20) is denied as moot. Plaintiffs alternative motion to transfer venue of this case to the Northern District of Alabama (Doc. 22) is granted. Dove's motion for leave to file a sur-reply on the venue issue (Doc. 27) is granted. Signed by Judge Sandra S Beckwith on 1/12/2015. (jlw1) [Transferred from Ohio Southern on 1/13/2015.]
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
JM-Nipponkoa Insurance Co., Ltd., et al,
Dove Transportation, LLC, et al,
Case No. 1:14-cv-202
Plaintiffs, JM-Nipponkoa Insurance Company and its insured, Makino, Inc., filed
this action against Dove Transportation, LLC, and Geneva Logistics, LLC, alleging they
were jointly and/or severally liable under the Carmack Amendment, 49 U.S.C.
§14706(a)(1). (Doc. 1) Plaintiffs sought to recover damages from Defendants, after a
large machine that Dove transported from Virginia to California, pursuant to a bill of
lading issued by Makino, was rejected by Makino’s customer. Dove filed a motion to
dismiss, arguing that this Court lacked personal jurisdiction over Dove. (Doc. 12)
Plaintiffs asked for additional time to respond to Dove’s motion, contending they needed
to conduct discovery to counter Dove’s jurisdictional arguments. Dove objected, and
this Court held a conference on August 25, 2014 to discuss the dispute. At the
conference, counsel agreed to proceed with the deposition of Thomas Canada, Dove’s
Managing Member, limited to the issue of jurisdiction. Mr. Canada was deposed on
Geneva Logistics was served with the complaint on May 1, 2014. (Doc. 7), but
has not appeared in the action to date. Plaintiffs filed a motion for a default judgment
against Geneva on August 21, 2014. (Doc. 16)
Plaintiffs filed a first amended complaint on September 26, 2014 (Doc. 18),
alleging additional facts regarding personal jurisdiction over Dove. Plaintiffs also added
three new state common law claims against the Defendants. Dove again moved to
dismiss for lack of personal jurisdiction, and alleged that the common law claims should
be dismissed under Fed. R. Civ. Proc. 12(b)(6). (Doc. 19) Plaintiffs responded to the
motion to dismiss (Doc. 22), and alternatively sought a transfer of the case to Alabama,
where both Dove and Geneva are located. Dove opposed the transfer request. (Doc.
24) Plaintiffs also sought leave to conduct additional jurisdictional discovery (Doc. 20),
which Dove opposed. (Doc. 21)
The motion to dismiss and to transfer venue were fully briefed when Plaintiffs
filed a second amended complaint on December 4 (Doc. 28). Dove then moved to
strike that pleading, arguing that it was improperly filed. (Doc. 29) All of the motions are
fully briefed and ready for decision.
Motion to Strike
The Second Amended Complaint omitted the three state law claims that Plaintiffs
first asserted in their First Amended Complaint, leaving only their original claim under
the Carmack Amendment. Dove challenged these state law claims under Rule 12(b)(6)
in its motion to dismiss (see Doc. 19 at p. 16). The jurisdictional allegations against
Dove contained in paragraph 8 of the First and Second Amended Complaints are
In its motion to strike the Second Amended Complaint, Dove quite rightly
contends that Rule 15 required Plaintiffs to seek leave of Court to file their Second
Amended Complaint, and that Dove is prejudiced because it must file yet another
motion to dismiss to reiterate its jurisdictional arguments. Plaintiffs respond that Dove
will not be prejudiced because they are simply dropping their state law claims.
Given the age of this case, and the fact that the Second Amended Complaint is
identical to the First Amended Complaint with respect to the jurisdictional allegations
and the Carmack claim, the Court will permit the Second Amended Complaint to remain
on the docket despite the fact that Plaintiffs did not properly seek leave of Court to file it.
Dove’s arguments concerning the now-abandoned state law claims that were asserted
in the First Amended Complaint are moot, and those claims (Counts 2-4 of the First
Amended Complaint) are dismissed with prejudice. Dove need not file another motion to
dismiss, and the Court will address Dove’s jurisdictional arguments which are fully
briefed regarding the First Amended Complaint.
Personal Jurisdiction over Dove
Plaintiffs have the burden of establishing that personal jurisdiction is properly
exercised over a defendant. The Court may rule on a jurisdictional motion to dismiss
without an evidentiary hearing. If so, the Court must consider the pleadings and any
affidavits filed in the light most favorable to Plaintiffs. Plaintiffs need only make a prima
facie showing of jurisdiction, which they can do by establishing “with reasonable
particularity sufficient contacts between [Dove] and the forum state to support
jurisdiction.” Neogen Corp. v. Neo Gen Screening, Inc., 282 F.3d 883, 887 (6th Cir.
Pursuant to Fed. R. Civ. Proc. 4(k)(1), in order to exercise personal jurisdiction
over a non-resident defendant, Plaintiffs must show that jurisdiction is proper under
applicable state law. In Ohio, a non-resident may be subject to specific jurisdiction in
the state if a basis for jurisdiction contained in Ohio’s long-arm statute, Ohio Rev. Code
2307.382, applies. That statute does not extend to the limits of the due process clause,
and so Plaintiffs must also establish that exercising personal jurisdiction would not
offend Dove’s Due Process rights. Miller v. AXA Winterthur Ins. Co., 694 F.3d 675,
679-680 (6th Cir. 2012).
Plaintiffs argue that Dove has “continuous, systematic and substantial” contacts
with Ohio, and that this Court has personal jurisdiction over Dove under the Carmack
Amendment. Plaintiffs therefore suggest that Dove’s arguments about specific
jurisdiction under Ohio law are irrelevant. Plaintiffs cite 49 U.S.C. §14706(d)(1), which
states that a civil action “may be brought against a delivering carrier in a district court of
the United States or in a State court. Trial, if the action is brought in a district court of
the United States[,] is in a judicial district, and if in a State court, is in a State through
which the defendant carrier operates.” Dove concedes it was the “delivering carrier” of
the machinery at issue, and Plaintiffs contend that is all they need show for the proper
exercise of jurisdiction under the statute.
Plaintiffs’ argument conflates the question of proper venue with the question of
whether personal jurisdiction is properly exercised over a non-resident defendant. In
Winona Foods, Inc. v. Kennedy, Inc., 2008 U.S. Dist. LEXIS 51578 (E.D. Wisc., June
26, 2008), the district court rejected a similar argument in a case brought by a
Wisconsin shipper-plaintiff against an Illinois delivering carrier, after a shipment of
plaintiff’s cheese was rejected by its customer upon delivery in California. The shipper
sued the delivering carrier in Wisconsin, arguing that the Carmack Amendment
conferred jurisdiction over the non-resident carrier. The district court disagreed, noting
that the statute’s
... venue provisions do not trump the question of personal jurisdiction... .
Although the [Carmack] Amendment allows actions to be brought in two
potentially different venues, the statute’s specific venue provisions are not
a substitute for personal jurisdiction - the court must still ensure at the
outset that it has the power to compel the defendant to appear in its court,
and that is ultimately a question of Due Process.
Id. at *4 and n.1, and citing Bird v. Parsons, 289 F.3d 865, 871 (6th Cir. 2002), where
the Sixth Circuit noted that when federal question jurisdiction is asserted, “personal
jurisdiction over a defendant exists if the defendant is amenable to service of process
under the [forum] state’s long-arm statute and if the exercise of personal jurisdiction
would not deny the defendant due process.” (internal quotations omitted) See also
Tokio Marine & Nichido Fire Ins. Co., Ltd. v. Flash Expedited Services, 2012 U.S. Dist.
LEXIS 163399 (D.N.J., Nov. 15, 2012), construing the Carmack statute as a venue
provision, not one conferring personal jurisdiction in plaintiff’s chosen venue, and
transferring the case to Ohio where the cargo loss at issue actually occurred.
The Court therefore rejects Plaintiffs’ argument that personal jurisdiction over
Dove is established by virtue of the Carmack Amendment’s venue provision. Plaintiffs
must show that jurisdiction is properly exercised under Ohio’s long-arm statute, because
Ohio law does not recognize general jurisdiction over a non-resident defendant. Conn
v. Zakharov, 667 F.3d 705, 718 (6th Cir. 2012). Dove argues that jurisdiction is lacking
under that statute, which states:
(A) A court may exercise personal jurisdiction over a person who acts directly or
by an agent, as to a cause of action arising from the person's:
(1) Transacting any business in this state;
(2) Contracting to supply services or goods in this state;
(3) Causing tortious injury by an act or omission in this state;
(4) Causing tortious injury in this state by an act or omission outside this state if he
regularly does or solicits business, or engages in any other persistent course of
conduct, or derives substantial revenue from goods used or consumed or
services rendered in this state;
(5) Causing injury in this state to any person by breach of warranty expressly or
impliedly made in the sale of goods outside this state when he might reasonably
have expected such person to use, consume, or be affected by the goods in this
state, provided that he also regularly does or solicits business, or engages in any
other persistent course of conduct, or derives substantial revenue from goods
used or consumed or services rendered in this state;
(6) Causing tortious injury in this state to any person by an act outside this state
committed with the purpose of injuring persons, when he might reasonably have
expected that some person would be injured thereby in this state;
(7) Causing tortious injury to any person by a criminal act, any element of which
takes place in this state, which he commits or in the commission of which he is
guilty of complicity.
(8) Having an interest in, using, or possessing real property in this state;
(9) Contracting to insure any person, property, or risk located within this state at the
time of contracting.
Ohio Rev. Code 2307.382(A).
The only subsections that might apply in this case are (1) or (4). (Subsection (2)
does not apply because Dove did not contract to supply any services in Ohio, but rather
to transport machinery from Virginia to California.) Plaintiffs argue that subsections (1)
and (4) apply, because Dove regularly engages in business in Ohio, and Makino was
injured in Ohio when it lost its policy deductible. According to Plaintiffs’ analysis of
information disclosed by Mr. Canada, Dove’s drivers travel on Ohio roads approximately
twice a month, and from 2010-2012 averaged 16,216 Ohio miles driven per year. But
Mr. Canada testified that only about 4% of the total miles driven by all Dove drivers in
2011 were through Ohio; by 2013, the Ohio mileage had dropped to about 2% of total
miles. Moreover, total miles driven does not neatly correlate to revenue earned; Mr.
Canada testified that miles that are not “loaded miles” (presumably empty trucks
traveling to pick up a load) are not necessarily revenue-earning miles. (Canada Dep. at
92-93) Plaintiffs cite Dove’s contract with an Ohio-based freight broker (TQL), and
surmise that Dove “must have” earned substantial revenue in Ohio due to this contract.
But there is no evidence that this has in fact occurred, or that Dove’s contacts with TQL
have produced substantial Ohio revenue. Plaintiffs further suggest that Dove is unfairly
attempting to minimize or conceal the extent of its Ohio contacts. They cite the fact that
Dove is insured by Great American Insurance Company, an Ohio insurer. But Mr.
Canada testified that he procures insurance through an Alabama broker, not by direct
contacts with Great American. Plaintiffs also cite Exhibit 8 to Mr. Canada’s deposition,
a description of Dove’s trucking and freight services that Plaintiffs’ counsel found on
another company’s website. But Mr. Canada did not know about this description and
was not familiar with the company that posted it. He agreed that most of the facts about
Dove that are reported there are readily obtainable from public sources. (Canada Dep.
at 105-107) Mr. Canada merged his trucking company with his father’s truck brokerage
company in 2013, but the brokerage has no Ohio customers. (Id. at 110-111)
Dove argues that the evidence in the record conclusively establishes that it does
not “transact business” in Ohio under subsection (1) of the statute, and that subsection
(4) is therefore also inapplicable. According to Mr. Canada’s affidavit and deposition
testimony, Dove has no employees, bank accounts, real estate, or terminal locations in
Ohio. Dove does not engage in direct marketing of its services, and does not advertise
its business in Ohio. While the phrase “transacting any business” has been interpreted
broadly by the Ohio courts, the long-arm statute also requires that the damages at issue
must arise from the defendant’s contacts with Ohio, that there be a proximate cause
relationship between the two. See Section 2307.382(C); Brunner v. Hampson, 441 F.3d
457, 463 (6th Cir. 2006). Dove contends there is no causal nexus between the alleged
damage to the machinery at issue and Dove’s contacts with Ohio.
The Court agrees. Dove’s assorted and attenuated contacts with Ohio are not
causally related to the damages that Plaintiffs allegedly sustained. And those contacts
are insufficient to show that Dove “transacts business” in Ohio, or that it regularly
engages in a course of conduct in Ohio or derives substantial revenue in this state.
Dove further argues that the assertion of jurisdiction in Ohio would violate Dove’s
due process rights, and would not comport with traditional notions of fair play and
substantial justice. To satisfy due process concerns, Plaintiffs must establish:
First, the defendant must purposefully avail himself of the
privilege of acting in the forum state or causing a
consequence in the forum state. Second, the cause of
action must arise from the defendant’s activities there.
Finally, the acts of the defendant or consequences caused
by the defendant must have a substantial enough connection
with the forum state to make the exercise of jurisdiction over
the defendant reasonable.
Southern Machine Co. v. Mohasco Industries, Inc., 401 F.2d 374, 381 (6th Cir. 1968).
The “purposeful availment” prong, which is the “constitutional touchstone” of personal
jurisdiction, protects a non-resident defendant from being subjected to personal
jurisdiction based on random or attenuated contacts with the forum or its residents.
Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1980)(internal citation omitted).
The existence of a contract involving an Ohio resident is not enough to show that a nonresident purposefully availed itself of the privilege of acting in Ohio. Calphalon Corp. v.
Rowlette, 228 F.3d 718, 722 (6th Cir. 2000).
Plaintiffs’ damages did not arise from Dove’s actions in Ohio. There is no
evidence that Dove had any direct dealings or negotiations with Makino, much less any
contacts with Makino in Ohio. The bill of lading attached to Plaintiffs’ complaint states
that the bill was issued to Trinity Logistics, not to Dove. The machinery was to be
shipped from Virginia to California. Trinity did not directly deal with Dove but contacted
Geneva, who in turn contacted Dove. Plaintiffs’ amended complaint alleged that Dove’s
driver picked up the cargo in Virginia and drove it to Alabama (Dove’s headquarters)
and then quit his job, so there is no way to “verify” that the driver did not come through
Ohio on that trip. (See Doc. 28, ¶8(f)) But as Dove notes, common sense would dictate
that the driver went directly from Virginia to Alabama, which would not involve traveling
in or through Ohio. To assume otherwise would be to engage in sheer speculation.
Moreover, simple but-for causation (the machinery was damaged while Dove
transported it) is not enough to satisfy the due process relatedness requirement. Burger
King Corp. v. Rudzewicz, , 471 U.S. 462, 474 (1985).
The third prong of the due process analysis requires a showing that Dove has a
substantial connection to Ohio, such that asserting jurisdiction would be reasonable.
The “reasonableness” analysis involves three factors: the burden on the defendant, the
interests of the forum state, and the plaintiff’s interest in obtaining relief.
Wataniya Restaurants Holdings, et al, 768 F.3d 499, 508 (6th Cir. 2014), quoting Asahi
Metal Indus. Co. v. Superior Court of Cal., 480 U.S. 102, 113 (1987). Dove has
consistently argued that it is extremely burdensome on the company to defend this case
in Ohio. It is a small company with seven trucks, about 12 employees, one dispatch
terminal located in Lincoln, Alabama, and is uninsured for this claim. Plaintiffs
undoubtedly have an interest in obtaining relief, but Ohio’s interest in this dispute is
rather slight. Most, if not all, of the salient events took place elsewhere. Makino is
headquartered in Ohio but is described on its website as a large machining and
engineering company with technical centers located in many states (including Ohio and
Alabama).1 Nipponkoa (which paid Makino the bulk of its loss and is subrogated to
Makino) is organized under Japanese law and its principal place of business is in Japan.
Dove notes that in Walden v. Fiore, 134 S.Ct. 1115, 1122 (2014), the Supreme Court
recently reaffirmed the principle that a substantial connection must “arise out of contacts
that the ‘defendant himself’ creates with the forum state.” Dove created no contacts
with Ohio: Makino issued a bill of lading to Trinity, and Trinity arranged for the cargo
shipment. The other contacts Plaintiffs cite (Dove’s insurer is located in Ohio, or the bill
of lading’s requirement that a copy be faxed to Makino in Ohio) are the sort of
attenuated and fortuitous contacts that are insufficient to satisfy due process concerns
and establish personal jurisdiction.
For all of these reasons, the Court concludes that Dove is not subject to personal
jurisdiction in this Court in this case.
See www.makino.com, last accessed January 7, 2015.
Change of Venue
In responding to Dove’s motion to dismiss, Plaintiffs alternatively seek an order
transferring venue of this case to the Northern District of Alabama, the district where
Dove’s terminal and offices are located. Plaintiffs cite 28 U.S.C. §§1406 and 1631,
which permit a court to transfer venue of an action to another district. Section 1631
particularly states that if the court finds that it lacks jurisdiction over the case, it may
transfer the action in the interests of justice. Plaintiffs argue that they are facing the
expiration of a statute of limitations on their claim against Dove, and that dismissing the
action rather than transferring it would risk the loss of their claim.
Dove opposes Plaintiffs’ motion. (Doc. 24) Dove notes that a dismissal for lack
of personal jurisdiction is without prejudice, leaving Plaintiffs free to re-file the action in
an appropriate jurisdiction if they wish. Dove concedes that the Court has discretion to
transfer the case in the interests of justice, but argues that Plaintiffs have not identified
what those interests are and why a transfer to Alabama might serve them. Dove notes
that many fact witnesses are likely not in Alabama, but are elsewhere. Dove also notes
that Trinity is in Minnesota, and it is unclear if Trinity would be subject to jurisdiction in
Alabama. Dove contends that it is Plaintiffs’ obligation to select an appropriate forum
for its claims, and that this Court should not attempt to select a “more appropriate” court
in the absence of a more complete factual record.
Section 1631 authorizes the Court to transfer a case when it concludes that
jurisdiction in Plaintiffs’ originally chosen forum is lacking. The statute simply requires
that the transferee court be one in which the action “could have been brought at the
time it was filed ...”. The Court has little trouble concluding that Plaintiffs could have
brought this action against Dove and Geneva in the Northern District of Alabama.
Myriad cases have concluded that the transfer of a case is proper if personal jurisdiction
is found lacking. See, e.g., Winona Foods v. Kennedy, supra, transferring a Carmack
Amendment claim; Donaldson Technology Group LLC v. Landstar Ranger, 347
F.Supp.2d 525 (S.D. Ohio 2004)(same); W. Inv. Total Return Fund v. Bremner, 762
F.Supp.2d 339 (D. Mass. 2011)(transferring venue to Illinois after finding lack of
personal jurisdiction over the defendants). Whether the transferee court might
ultimately conclude that a different venue is proper is not before this Court at this time.
The Court therefore grants Plaintiffs’ alternative motion to transfer venue of this
case to the Northern District of Alabama.
Plaintiffs’ Motion for Default Judgment Against Geneva Logistics
As noted above, Plaintiffs moved for entry of a default judgment against Geneva
Logistics, who has failed to appear or answer the complaint. (Doc. 16) Dove
responded, arguing that it would be improper to enter a judgment against Geneva that
would operate as a final and conclusive decision with respect to Plaintiffs’ alleged
damages, which Dove intends to challenge. (Doc. 17)
A long-standing principle flowing from Frow v. De La Vega, 82 U.S. 552 (1872),
is that courts should avoid the risk of inconsistent adjudications that is posed by default
judgments when an action charges several defendants with joint liability, and one of
those defendants defaults. Subsequent case law has generally held that if defendants
are alleged to be jointly and/or severally liable, a default judgment determining damages
should not be entered against a defaulting defendant until the matter has been
adjudicated against all defendants. See, e.g., Hunt v. Inter-Globe Energy, Inc., 770
F.2d 145, 148 (10th Cir. 1985); Hitachi Medical Systems America, Inc. v. Horizon
Medical Group, 2008 U.S. Dist. LEXIS 107934, at *8-9 (N.D. Ohio, Jan. 28, 2008).
Plaintiffs’ complaint alleges that Defendants “jointly and/or severally agreed to transport
the load as an interstate carrier ...”. (Doc. 28 at ¶18)
Therefore, to avoid any preclusive effect of a default judgment against Geneva,
the Court will deny without prejudice Plaintiffs’ motion for a default judgment, which may
be renewed at an appropriate time.
Dove’s motion to strike the Second Amended Complaint (Doc. 29) is denied for
the reasons stated above. Counts 2, 3 and 4 as alleged in Plaintiffs’ First Amended
Complaint are dismissed with prejudice. Dove’s motion to dismiss Plaintiffs’ complaint
for lack of personal jurisdiction over Dove (Doc. 19) is granted. Plaintiff’s motion to
conduct additional jurisdictional discovery (Doc. 20) is denied as moot.
Plaintiff’s alternative motion to transfer venue of this case to the Northern District
of Alabama (Doc. 22) is granted. Dove’s motion for leave to file a sur-reply on the
venue issue (Doc. 27) is granted.
THIS CASE IS CLOSED.
DATED: January 12, 2015
s/Sandra S. Beckwith
Sandra S. Beckwith, Senior Judge
United States District Court
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